The introduction of a new low-cost loan fund, at an interest rate under 3%, and an extension of the farm restructuring relief scheme until 2019 were welcomed by Macra and the IFA. However the ICSA said that it is concerned that the move could be used to cover up deeper income issues on farms.
“There is no doubt that low interest loans have a role to replace high interest merchant and short term banking finance for those under pressure with repayments,” said ICSA president Patrick Kent. “However, farmers are being encouraged to invest growing production which is dangerous against a backdrop of poor market outlook.”
The ICMSA criticised the allocation of the EU Crisis Fund into the low interest loans. Its president, John Comer, also described the 'Step-Out' facility for income averaging as a "niche solution" that was irrelevant to the main body of farmers.
Capital Acquisitions Tax
Macra and the ICSA criticised the Minister for Finance for not increasing the Capital Acquisitions Tax threshold in Category A further.
The significant measures in today’s Budget on low-cost credit, increased funding for farm schemes, the reversal of cuts to Farm Assist and tackling income volatility were in response to the IFA’s farm incomes campaign, according to IFA president Joe Healy.
“The decision to increase the Earned Income Tax Credit by only €400 to €950 falls short of the €1,650 PAYE allowance and this must be reached in next year’s Budget to remove discrimination against farmers and the self-employed,” Healy said.
He acknowledged the €107m increase in funding of farm schemes under the Rural Development Programme (RDP), in particular the €69m increase for GLAS to €211m for 50,000 farmers and the new €25m sheep welfare scheme.
“The Government must build on these schemes to reach the €250m target for GLAS set out in the RDP and continue to improve suckler and sheep supports,” said Healy who criticised the decision not to start the restoration of ANC funding in 2017.
The reversal of cuts to Farm Assist and the provision for 500 extra places under the Rural Social Scheme were welcomed.
The ICSA added that the announcement of flood relief schemes was notable for the absence of any reference to the Shannon and they called for urgent action on this.
“Regarding plans for consultation on sugar tax, such measures are useless unless accompanied by a national strategy to increase consumption of milk by children instead and the promotion of healthier dietary options that include locally sourced fresh produce,” ICSA president Patrick Kent said.”